Saudi Basic Industries Corp. (SABIC), the world's largest petrochemical firm by market value and China's Sinopec Corp. have agreed to invest over US$1 billion in a 1 mln tpa naphtha cracker to produce ethylene in Tianjin. The companies will also partner for 2 production lines of polyethylene and one mono ethylene glycol (MEG) facility. The US$1 bln investment will be shared in a 50:50 ratio by the two partners. The facilities are part of a US$3.1 bln investment program planned by Sinopec, and includes an expanded refinery and other downstream petrochemical units. The preliminary deal has been signed in late May, and awaits final approval from Beijing.
If approved, this deal will mark a new era for global companies as it comes at a time when Beijing had apparently made a shift to self-reliance in building the petrochemical sector.
In a bid to meet a double-digit growth in petrochemicals consumption, China's Sinopec Corp and PetroChina are poised to add at least 6 huge crackers at an investment of US$20 billion by 2010, extending a boom started a decade ago. Global players BP, Shell, BASF and ExxonMobil were chosen as partners for their cash, technology and management, owning up to a 50% stake in the petrochemical complexes on the east coast. But the approach has begun to shift since last year as Beijing, rich in cash and management experience, moved to take on foreign partners for only part of a petrochemical complex rather than the whole integrated venture. Only firms with high end technology or those that can guarantee long-term crude oil supply are preferred candidates.
11-Jun-07 
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